The joint statement assured that all customer deposits in these banks will be honored by the federal government.
The US Treasury, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) announced on Sunday that they will take “firm action” to strengthen public confidence in the US banking system. This decision was made after the FDIC and the Federal Reserve recommended that Silicon Valley Bank and Signature Bank be placed in the systemic risk exemption. The move will allow the FDIC to resolve the problems of Silicon Valley Bank, based in Santa Clara, California, in a way that “protects” depositors’ money and ensures access to credit. The same will apply to Signature Bank, based in New York, New York, which was closed today by the state chartering authorities.
In a joint statement, Treasury Secretary Janet L. Yellen, Chairman of the Federal Reserve Board Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg said, “This step will ensure that the US banking system continues to play an important role in protecting deposits and providing access to credit for households and businesses in a way that promotes strong and sustainable economic growth.”
Senior management of both banks has been removed, and shareholders and holders of certain unsecured debts will not be protected. However, depositors will have access to all their money from March 13, and no losses will be incurred by taxpayers. Any losses incurred in support of uninsured depositors shall be recovered by a special assessment on the banks, as required by law.
The Federal Reserve Board also announced on Sunday that it will provide additional funding to eligible depository institutions to ensure banks have the ability to meet the needs of all depositors. “The US banking system remains resilient and fundamentally sound,” the statement said. “These reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.”
The “decisive action” to protect savers’ savings is a welcome step; but also a showcase example of why Bitcoin was created. The “Chancellor on the Brink” message included in the genesis block is an express comment by Satoshi Nakamoto on the inspiration for the technology. We are now seeing a new iteration of the inevitable consequences of the fiat currency system: and it is a new proof of why Bitcoin exists.